Johnson fury over Livingstone charges

Wed, Apr 4, 2012, 01:00

MAYOR OF London Boris Johnson issued an expletive-filled tirade against challenger Ken Livingstone yesterday following a radio debate.

During an ill-tempered encounter on London’s LBC radio, the two men clashed repeatedly over their tax affairs, with each accusing the other of deliberately avoiding tax. Shortly afterwards, as they travelled in a lift, Mr Johnson repeatedly called his main opponent in the May 5th election “a f***ing liar”.

Former Labour mayor Ken Livingstone has been on the defensive after it emerged that he had set up a company, Silveta Ltd, to handle some of his earnings from after-dinner speeches and a book.

Through the company, Mr Livingstone – who has repeatedly said tax avoiders should face stronger penalties – paid capital gains tax at 18 per cent on his earnings, rather than income tax at up to 50 per cent.

During the radio debate, Mr Livingstone claimed that Mr Johnson had used a company of his own, Finland Station, to handle part of his income – a charge vigorously denied by the Conservative mayor.

A statement from Mr Johnson’s accountant was later released by the mayor’s election team, stating he “is liable to income tax on the entirety of his earnings and has made all due payments”.

Accountant Robert Maples said: “He is not party to any tax avoidance or deferral schemes, nor has any of his income been transferred to any other members of his family.”

Later, Mr Johnson said any payments to him, presumably including his £250,000-a-year contract for a weekly Daily Telegraph column, were paid to him personally.

“No income earned by me has ever been paid to a ‘service’ company, through which a person or person’s freelance earnings can be channelled so that they pay corporation rather than income tax.

“Of course the real point is not about my tax arrangements. It is about the hypocrisy of a man who for years has railed against those who use special arrangements to reduce their tax and who has then been caught – bang to rights – doing the very same thing himself,” Mr Johnson added.

Travelling in the lift for a roof- top press conference with Mr Livingstone and Liberal Democrat candidate Brian Paddick, Mr Johnson went “nose to nose” with Mr Livingstone, telling him three times: “You are a f***ing liar.”

Mr Livingstone said Mr Johnson had lost his temper because he had “lost the debate” in relation to Mr Livingstone’s promises to cut Tube and bus fares in the city.

The row over Mr Livingstone’s tax affairs may have hurt the Labour candidate’s bid to win back the mayoralty, since an opinion poll lead in early January has evaporated. Mr Johnson now leads by eight points in the most recent surveys.

Refusing to withdraw his charges about Mr Johnson’s one-third shareholding in Finland Station, Mr Livingstone later issued questions to him: had Mr Johnson received any dividends from the company or had he paid income or capital gains tax when he sold his shareholding in the company?